Markets Turn Uncertain on China's Stimulus Silence
Asian stocks wavered Thursday as some markets were disappointed with the lack of any detail to China's stimulus plans, while the euro fell on expectations the European Central Bank will cut rates to an all-time low later in the day.
China's Premier Wen Jiabao said that China will achieve 8 percent growth this year-- a level considered key to maintain employment growth in the country -- despite the deepening global economic crisis. Wen did not announce fresh economic stimulus as some investors had hoped.
The euro slipped ahead of the ECB meeting, with the central bank overwhelmingly expected to cut interest rates by half a percentage point to 1.5 percent in a bid to revive the sputtering euro-zone economy. The focus instead is for signals on where the rate floor lies as euro zone policy makers seem reluctant to follow the U.S. Federal Reserve and the Bank of Japan in going towards zero. Crude oil prices were trading at the $45 a barrel level after jumping 9 percent in New York trade Wednesday.
The Nikkei 225 Average gained 2 percent, rising for a second day, as hopes for fresh stimulus steps in China and an economic recovery there boosted machinery stocks such as Komatsu and shipping firms.
Seoul shares ended a touch lower in volatile trade that saw the main index move in and out of positive territory, with falls led by Hynix Semiconductor after news the Taiwanese government would set up a DRAM company.
Australian shares closed 0.7 percent higher with miners such as Rio Tinto leading the gains. But the market was disappointed by a lack of fresh stimulus plans in China's 2009 budget.
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Hong Kong shares flitted in and out of positive territory during the training day, but closed 1 percent lower as investors moved to lock in gains on the previous session's rally, but a slight recovery in HSBC limited losses on the main index. Shares of Hutchison Telecommunications International jumped more than 11 percent at one point after the firm said it would spin off its Hong Kong and Macau businesses and will be distribute the unit's new shares to shareholders as an interim dividend.
Singapore's Straits Times Index surrender early gains, to end down 1.7 percent as investors were reluctant to chase prices higher amid lack of new measures from Beijing to shore up China's growth. Banks such as DBS Group, and developers led the decline among blue chips.
China's Shanghai Composite Index pared back earlier gains of as much as 2 percent to end 1 percent higher after Prime Minister Wen's opening speech at National People's Congress did not make the announcement markets had craved of an increase in its $585 billion economic stimulus plan